Extortion with Protection: Understanding the effect of rebel taxation on civilian welfare in Burundi
AbstractUsing a panel dataset from Burundi where information on protection payments during the 10 year civil war were collected, we test the relationship between payments, the nature of extraction by the rebels, and welfare outcomes. We ask, does payment to rebels insure against future welfare loss and does the nature of payment matter? Specifically, does the level of institutionalisation of extraction within the rebel governance structure provide a form of insurance for future welfare? No less than 30% of the interviewees made at least one payment. Rebels extract these taxes through one of two routes: an ‘institutionalised’ and regular cash-with-receipt method or an ad hoc and unpredictable labour extraction. Using matching methods we find that payment through the institutionalised route increases household welfare between 16 and 25%. Ad hoc extraction has no effect. We situate our findings in the empirical literatures on contributions to mafia-type organisations and rebel governance.
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Bibliographic InfoPaper provided by Households in Conflict Network in its series HiCN Working Papers with number 167.
Length: 62 pages
Date of creation: Jan 2014
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Web page: http://www.hicn.org
extortion; taxation; forced labour; welfare; rebellion; Africa;
Other versions of this item:
- Rachel Sabates-Wheeler & Philip Verwimp, 2014. "Extortion with Protection: Understanding the effect of rebel taxation on civilian welfare in Burundi," Working Papers CEB 14-004, ULB -- Universite Libre de Bruxelles.
- NEP-AGR-2014-02-08 (Agricultural Economics)
- NEP-ALL-2014-02-08 (All new papers)
- NEP-DEV-2014-02-08 (Development)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Emily Oster, 2013. "Unobservable Selection and Coefficient Stability: Theory and Validation," NBER Working Papers 19054, National Bureau of Economic Research, Inc.
- Konrad, Kai A. & Skaperdas, Stergios, 1997. "Credible threats in extortion," Journal of Economic Behavior & Organization, Elsevier, vol. 33(1), pages 23-39, May.
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